Character Risk Assessment: Investigation revealing a shell corporation with phantom directors Written by Kaizen Enterprises Pty Ltd
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Case Studies

 

Client: Private investor

Project: To conduct a risk assessment regarding a Sydney-based ‘international financier’

Service: Character Risk Assessment

Key achievements:

  • Identification of the likelihood of fraud, based on the lack of verifiable information about the company’s directors, and the conflicting information supplied by directors
  • Discovery that despite advertising itself as an established international financier, the company had a capitalisation of just $100 and no named clients

Synopsis:

Kaizen Enterprises was engaged to conduct a Character Risk Assessment regarding an ‘international financier’ by a potential investor. According to its website, the company was a large financier that had a strategic alliance with Macquarie Infrastructure Group.

We immediately established a number of inconsistencies in basic information regarding this company, which rang alarm bells. Further investigation revealed that:

  • No clients were listed on the website;
  • A Credit Report claimed that the directors were Australian citizens, but they were not shown on Electoral Rolls;
  • The Report listed one of the director’s former employers, allegedly until 2004, as a company which had ceased to exist in 1990;
  • A senior consultant and director whose biography on the company website claimed he was a Chartered Accountant was not known to the Institute of Chartered Accountants, the peak membership body;
  • Every piece of verifiable information was dodgy, e.g. a director with an alleged international career in financing large construction projects had only one Internet reference available, which referred to him as a “fashion designer”;
  • Much information that should have been available and verifiable was never discovered, despite extensive research;
  • None of the directors owned any property, which is unusual for well-paid financiers; and
  • The company had a total market capitalisation of $100.

We subsequently concluded that the individuals had provided our client with fraudulent business and personal credentials, based on the fact that none of the information which had been given to our client could be corroborated or verified.